AOL may sell off some of its 800 patents for cash

The web company has allegedly hired investment firm Evercore to explore …

AOL, a company that’s been struggling with shrinking sales over the last several years, may be looking for new sources of income. According to Bloomberg “three people with knowledge of the matter” said the company is hiring investment firm Evercore to find buyers or licensees for some of its more than 800 patents. The three sources also said Evercore would “explore other strategic options” for the company, without going into more detail.

Since 2009, when AOL separated from media content giant Time Warner, the web company has seen a 29 percent drop in revenue, according to Bloomberg. Part of this could be due to the ever-diminishing returns of AOL’s once ubiquitous dial-up service (subscription revenue from AOL's dial-up dropped 18 percent from 2010 to 2011). Earlier this month, AOL cut more than 40 employees from AIM, their Instant Messenger department.

The three anonymous sources also said that several private-equity firms have recently approached AOL about privatizing the company and buying out its shareholders, but that AOL has not yet made a deal with any other company. AOL’s CEO Tim Armstrong has said publicly that he would be open to going private, and was in talks with Yahoo as early as September, although no deal was initiated then, either.

Investment Bank MDB Captial Group said licensing some of its patents could earn AOL as much as $1 billion in licensing fees. A quick search of AOL’s patents reveals such prime intellectual property as “e-mail integrated instant messaging” which is included in most e-mail clients these days, a patent for “host based-intelligent results related to a character stream” much like Google search’s auto-complete, and a “system for automated translation of speech” similar to a system developed by Microsoft and shown off earlier this year. Large companies like Google and Microsoft might be potential buyers for such patents in order to prevent infringements on alternative ways of developing products similar to theirs, or simply to avoid patent lawsuits down the road.

Evercore has been hired by companies like McGraw Hill, mortgage insurer PMI, and the airline Northwest Air, to find buyers for portions of the companies or to assist with restructuring.

20 Reader Comments

There is no dishonor* in admitting that your best days in Internet history have come and gone with the advances of technology and the changes in public sentiment. You chose, at an institutional level, to not lead the advances, but instead to cash in on your early successful marketing strategies which are no longer relevant nor profitable. It's time to go.

First step dismantling the patent nonsense? Make them non-transferable.

Patents were designed to protect the inventor and the initial investors. Once patented, the holders reap the benefits. Selling them as commodities to others who had no hand in their development is simple restraint of trade by artificially constraining markets.

It's pretty crazy when you think about it, what with the cornucopia of inexpensive broadband service available in the US.

BS. Located only 46 miles from a large city (by western USA standards) I still use dial-up. There is a major fiber optic cable backbone running underground - just 200' ft in front of the house but we can't get tapped into it. Digital phone lines ? - don't make me laugh. Poor third world countries have better telephone service than Quest has provided here. So: no cable & no DSL.

I borrowed a 4G HotSpot modem the other day and brought it home for a test. In the evenings the speed was SLOWER than dialup (ranging from 4 kbs to 12kbs per second). To be honest the modem worked better in the morning when fewer neighbors were on-line to giggle at their You-Tube videos. Verizon's coverage umbrella ain't all that great here, and I suspect thats true for many other - even more remote locations. Satellite broadband has its quota of bottlenecks too from what I hear. Also $60/month for cellular or $80/month for satellite isn't inexpensive - especially when much of the time it isn't even as fast as dial-up.... Hopefully, someday the situation will improve.

BS. Located only 46 miles from a large city (by western USA standards) I still use dial-up. There is a major fiber optic cable backbone running underground - just 200' ft in front of the house but we can't get tapped into it. Digital phone lines ? - don't make me laugh. Poor third world countries have better telephone service than Quest has provided here. So: no cable & no DSL.

I borrowed a 4G HotSpot modem the other day and brought it home for a test. In the evenings the speed was SLOWER than dialup (ranging from 4 kbs to 12kbs per second). To be honest the modem worked better in the morning when fewer neighbors were on-line to giggle at their You-Tube videos. Verizon's coverage umbrella ain't all that great here, and I suspect thats true for many other - even more remote locations. Satellite broadband has its quota of bottlenecks too from what I hear. Also $60/month for cellular or $80/month for satellite isn't inexpensive - especially when much of the time it isn't even as fast as dial-up.... Hopefully, someday the situation will improve.

Not everyone wants to live in a city - if you catch my drift....

You could always *accidently* drill into that cable.. maybe they'd care after that?

But I was gonna say.. if your within 10 miles or so of major broadband.. my suggestion would be to investigate point to point/yagi transmission of wireless signals like even g or n or other technologies.. from someone who has the service.. otherwise maybe you’ll have better luck when all the LTE networks finally get to be everywhere.. but I expect they’ll also have usage problems.. like EV

I'm personally thinking of moving to kansas city for googles myth of 1 gbit internet.. hopefully it shows up

It's pretty crazy when you think about it, what with the cornucopia of inexpensive broadband service available in the US.

BS. Located only 46 miles from a large city (by western USA standards) I still use dial-up. There is a major fiber optic cable backbone running underground - just 200' ft in front of the house but we can't get tapped into it. Digital phone lines ? - don't make me laugh. Poor third world countries have better telephone service than Quest has provided here. So: no cable & no DSL.

I thought the inclusion of the word 'cornucopia' would be sufficient to indicate sarcasm.

Yeah, and I bet most of its dial-up customers are ones who long ago got broadband and never realised they could access AOL via BYOA (bring your own access) for free. So AOL keeps milking them for $23.90 a month or however much it is now.

@The Master. I live in out in the boodocks of western Oregon, so if you know of a fairly inexpensive way to build a 1000 foot tower for said yagi system to reach over the mountains, I'd be grateful.

Climb up the mountain put a tower up there? lol

Umm.. nope sorry I don't.. I would suggest you not give up.. explore some options.. if your neighborhood doesn't have one of those AWFUL telco laws that says you can't get broadband for your community.. you could look into finding a way to get it run into your area/shared with neighbors..

Also the governments supposed to be giving away free spectrum for local networks or something.. you might look into that.. but that's all I know (off-hand)

Let me also recommend you go to broadbandreports.com forum.. that is where all the dsl/cable/fiber/wireless junkies hang out.. this forum is great for software and some of that.. but if your into internet that's the place to go

Why not also talk to the company that either leases fiber too under your area.. or the person who owns the land? It's always possible you could make something happen.. you don't know till you try.. if I were you.. I'd never give up nor surrender.. I'd explore if not move lol